The Ethereum whale with a 75% win rate in 4 bets was liquidated on a short position of 10,080 ETH, causing significant losses.
This whale began shorting ETH on July 28, going from an unrealized profit of $12.25 million to losing everything and incurring a loss of $19 million due to continuing to extend the position instead of taking profits.
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The ETH whale was completely liquidated on a short position of 10,080 ETH worth $40.76 million.
The initial short position of 70,000 ETH was reduced to 12,500 ETH after multiple liquidations and self-liquidations.
How was the Ethereum whale liquidated on its ETH short position?
The Ethereum whale experienced liquidation of a short position with over 10,000 ETH, equivalent to $40.76 million, after a series of liquidations and self-liquidations.
Starting from July 28, this whale built a short position of around 70,000 ETH, but after several liquidations and automatic stop-losses, the position was reduced to 12,500 ETH. The final liquidation price recorded was $4,095 per ETH.
This indicates that significant volatility in the cryptocurrency market can put immense pressure on high leveraged positions, even for seasoned whales.
Why did this whale incur a loss of $19 million, despite having previously made a profit?
Although the short position was profiting $12.25 million at one point (on August 3rd), the whale continued to hold and roll over the position instead of taking profits immediately.
The strategy of rolling positions helps maintain leverage but also increases risks when the market moves against. As a result, all unrealized profits evaporated, resulting in a loss of $19 million to date.
The clear lesson from this event is the importance of personal risk management, especially with large leveraged short positions in a highly volatile cryptocurrency market.
Continuing to hold the position instead of taking timely profits caused the Ethereum whale to lose a significant amount of profit, demonstrating the risks of using leverage in cryptocurrency trading.
Yu Jin, On-chain analyst, reported on August 9, 2024
What lessons can be learned from the liquidation of ETH whales?
The first lesson is not to be greedy by holding a position when the market has reached a high technical profit, as volatility can reverse quickly.
Secondly, managing positions and stop-loss orders tightly is crucial, especially with large leveraged trades like shorting ETH.
Ultimately, closely monitoring on-chain signals and market analysis helps traders make timely decisions, minimizing the risk of asset loss.
Frequently Asked Questions
How to know when to take profits on a cryptocurrency short position?
Combining technical analysis with on-chain signals helps identify market strengths, allowing traders to take profits when signs of reversal or profit targets are reached.
What specific risks does a short position have compared to a long position?
Shorting usually has high risks because the cryptocurrency market tends to rise in the long term, while short positions face the risk of significant losses when prices suddenly increase.
When does liquidation of positions occur in cryptocurrency trading?
Liquidation occurs when the collateral asset is insufficient to maintain a leveraged position due to prices moving against the order.
How to limit losses when trading with leverage?
Apply strict risk management, set reasonable stop-loss orders, and avoid excessive leverage.
What role does an on-chain analyst play in predicting the cryptocurrency market?
They analyze transaction data and cryptocurrency wallets to speculate on the trends and behaviors of whales, serving as a valuable and objective reference.
Source: https://tintucbitcoin.com/eth-whale-lo-19-trieu-usd-short/
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